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This wont hurt our cause at all - Telstra flicks switch on high speed broadband network

Matt O'Sullivan
February 6, 2008 - 12:25PM

Telstra and the Federal Government have today overcome a 14-month impasse over its higher-speed broadband network after the company gained regulatory certainty, in an agreement which will provide up to 2.4 million homes and businesses with faster broadband speeds.

In a major breakthrough ahead of talks over plans for an $8 billion national fibre-optic network, the Prime Minister, Kevin Rudd, and Telstra's chief executive, Sol Trujillo, announced the switch-on of the company's entire ADSL2+ fixed-line network in Canberra this morning.

In stark contrast to his poisonous relationship with the Howard Government, Mr Trujillo said it was clear that the Rudd Government ``understands the artificial impediments that have been holding back investment in broadband, and is prepared to act in consumers' best interests''.

Telstra initially turned on ADSL2+, which is provided over its copper-wire network, in November 2006 but offered the fastest speeds of up to 20 megabits per second only in areas where rivals such as Optus and iiNet already offered the service primarily capital cities and large regional centres.

Telstra had refused to extend the network's coverage until it received guarantees of regulatory certainty because it was concerned the Australian Competition and Consumer Commission would force it to open the network to rivals at a price it regarded as too cheap.

Telstra remained steadfast in its refusal throughout last year despite repeated protestations from the Howard Government and the ACCC's chairman, Graeme Samuel.

But Telstra said today that the breakthrough came after the Rudd Government made it clear it did not consider a compelling case had been made for regulating third-party access to the service.


In a sign Telstra is prepared to adopt a more diplomatic approach ahead of talks over a national fibre-to-the-node network, the company said it was also committed to investing more than $4.1 billion in an open access service "that would be available for competitors to use on competitive terms''.

Sources say Telstra approached the Rudd Government about the ADSL2+ network after the election in November.

The Government then sought advice from the ACCC, which subsequently resulted in the company gaining the certainty it was seeking.

The deal today will extend speeds of up to 20 megabits per second to the vast majority of the 2.4 million homes and businesses where the network extends.

However, the technical limitations of ADSL2+ mean broadband speeds are slower the further households are from exchanges.

High speed ADSL2+ broadband can provide speeds of 12 to 20 mbps to homes and businesses within 1.5 kilometres of an exchange and about 8 mbps to users 3 km from an exchange.

A standard dial-up connection provides speeds of only 5 kilobits per second while a standard ADSL connection just 256 kbps.

Telstra plans to switch on 370 exchanges serving nearly 1.8 million premises, including those in Mittagong and Banora Point, by next week. A further 132 exchanges will be activated within three weeks and 405 exchanges within 200 days.

Source - http://business.smh.com.au/telstra-flicks-switch-on-high-speed-broadband-network/20080206-1qia.html


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